Congress manifesto: MSMEs to exempt from all laws for 3 years

The Indian National Congress has set MSME rehabilitation in its sight ahead of the Lok Sabha elections this month, say media reports. On Tuesday, the party released a manifesto which sought to “devise a rehabilitation plan for MSMEs that were severely affected, and help them revive and grow.”

Congress also promised to work closely with the RBI, resume credit lending, and ensure sufficient liquidity and cash in circulation for MSMEs.

The following points addressing the MSME sector were found in the manifesto:

1. The party promises regulatory forbearance for MSMEs, exempting them from all applicable laws and regulations for three years, starting April 1, 2019. However, Minimum Wages Act and tax laws will still be applicable. In the case of new businesses, the three year period starts from the date of commencement of business.
2. The current definition of MSMEs is based on capital employed. Arguing that this is biased against labour, the Congress manifesto suggests defining MSMEs by employment. Under this, a business employing 10 people or less will be a micro enterprise, between 11 and 100 will be small, and between 101 and 500 will be medium.
3. An Enterprise Support Agency to be created, which will help with all-round business support for MSMEs and startups.
4. The party will promote mass entrepreneurship and aid MSMEs to replicate tried and tested business models.
5. The party to encourage setting up state-level and regional-level institutions to provide bank credit to MSMEs.
6. The party to encourage state governments to revive State Financial Corporations in order to facilitate long-term credit to MSMEs.
7. Setting up of world-class infrastructure to be ensured, to give a boost to the growth of manufacturing sector and its MSMEs. The focus would be on expanding current MSMEs and setting up new ones in industrial hubs and cluster towns.
8. A patent pool to be created the party after it has acquired patents. This pool comprising advanced technologies will be made accessible to MSMEs.

MSMEs, which are the second largest employer in India after agriculture, is a key focus area for the current government as well.

In November, Prime Minister Narendra Modi unveiled several initiatives to enhance credit access and boost employment for the MSMEs at the launch of the MSME Support and Outreach Programme.

Announcing a 59-minute Rs 1 crore loan, Modi had said that GST-registered MSMEs would get two percent rebate in interest on new or incremental loans.

The government had also decided to increase interest subvention on pre and post shipment credit. It was increased from three percent to five percent.

It was also decided that companies whose turnover exceeds Rs 500 crore will have to be registered on the Trade Receivables e-Discounting System (TReDS platform) in order to smoothen the cashflow for the MSMEs.

To read the complete list of MSME initiatives unveiled, please follow this link.

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